Management services

The taxpayers were closed-end investment trust companies. They claimed VAT repayments on management service payments which were standard rated but exempt for authorised trust schemes from 1990 and for open-ended investment companies from 1997.

The service providers accounted for output tax they charged to the Revenue after claiming credit for input tax they had incurred and paid the net difference to the tax department.

The European Court of Justice ruled in 20017 – in J P Morgan Fleming Claverhouse Investment Trust plc and another v CRC (C-363/05) [2008] STC 1180 – that the VAT exemption should also apply to closed-end investment funds.

The taxpayers in this instance applied for a refund of VAT they had paid on management fees. They claimed for the years 2001 to 2004 because of the three-year limitation period in VATA 1994 s 80.

The House of Lords then ruled in Fleming...